Retirees lose tens of thousands of hryvnias because of artificial restrictions

Even with high official wages and considerable work experience, the pension in Ukraine may be much lower than expected. Pension expert Viktor Bogdanov drew attention to this problem.

Wage restriction in pension calculation

By the end of the 1990s, the amount of the pension was directly dependent on the actual income-the higher the salary, the higher the pension. However, the Law on Pension Support adopted in 1991 introduced the limit for the maximum pension, although contributions to the Pension Fund were further deducted from the total amount of income.

This has led to high wages; for example, metallurgists, energy chemists, and staff of watch companies began to receive pensions that do not reflect the real amounts of their contributions. As a result, these individuals may lose hundreds of thousands of hryvnias through these payments.

Modern income limits for pension contributions

The situation changed significantly in 2004, when the maximum amount of income from which contributions were levied was set at 5.6 times the average salary in the country. In 2011, this figure was replaced by 15 subsistence minimums for non-disabled persons, which is now approximately 46,000 hryvnias. According to Bogdanov, if the principle remained unchanged, the base for calculation would exceed 125 thousand hryvnias, which could significantly increase pensions.

LIMITS OF SUPPLY AND MAKE INCREASE

Additional losses occur due to restrictions on the length of service: for employees of harmful industries, it can exceed 0.85, and for others, 0.75. By 2017, this ratio had increased to 1.35, allowing for a significant rise in payments.

In addition, pensioners face difficulties in confirming the length of service by 2000. The law does not require mandatory submission of primary accounting documents. Still, in practice, the Pension Fund often refuses to accept certificates without such confirmations, which becomes a serious barrier for many older adults.

Experts emphasize the need to reform these norms so that Ukrainians receive pensions at a level that corresponds to their contributions to the labor market.

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